A smallholder tea farmers' factory affiliated with the Kenya Tea Development Agency (KTDA) has won a Sh31.5 million refund after a court nullified a 2012 land sale, citing fraudulent dealings involving the factory’s personnel and the property sellers.
Justice James Olola directed Johnstone Muchai Muthanga and Muchastone Limited to refund the cash to Iria-ini Tea Factory Ltd in Nyeri, as he canceled the August 2012 title deed for the 90-acre land situated in Nyandarua.
While ruling on a case filed by the factory in June 2013 seeking recovery of the funds, the judge found that the land belonged to Naomi Wanjiku Waiyaki, who died in 2008, and the same forms part of her estate.
"There was absolutely no evidence placed before the court to demonstrate that either the first or third defendants (Muthanga or Muchastone Ltd) had acquired the suit property from Naomi Wanjiku Waiyaki, who until her death in February 2008 remained the registered proprietor of the suit property," said Justice Olola.
Mr Muthanga had told the court that he bought the land from Waiyaki in 1998 at a price of Sh8.1 million and that the transfer was done at the Land's Control Board in Ol-Kalou. He added that the transaction was through a sale agreement drafted by an advocate.
The factory sued, claiming that despite full payment of the purchase price, Muchastone Ltd had not given vacant possession of the said parcel of land. This was after Waiyaki's family lodged a caution at the Land Registry.
The court papers show that the land was registered in the name of Muchastone Ltd in April 2012, before being sold to the tea factory four months later, and the purchase price was paid by KTDA through advocates.
However, stating that the transaction was hastily carried out, the court concluded that "some of the plaintiff’s (Iria-ini Tea Factory) personnel acted in connivance with the first and third defendants with the intent to defraud both the plaintiff and the fourth defendant (Waiyaki)".
"That being the case, I was not persuaded that the third defendant (Muchastone) had a valid title which it could have passed to the plaintiff (Iria-ini Tea Factory). From the material placed before the court, it was evident that the transaction involving the sale of the suit property was conducted hastily between the first defendant (Muthanga) and the plaintiff’s personnel who failed to conduct proper due diligence to establish the root of the third defendant’s title," said Justice Olola.
The court noted that there was no evidence in the form of a title deed indicating that Mr Muthanga, "who was the main player in the entire transaction", was ever registered as a legal owner of the suit land.
"In addition, there was no valid transfer form executed by the first defendant (Muthanga) and/or Naomi Wanjiku Waiyaki to indicate a transfer of the suit land to the third defendant (Muchastone Ltd)," said Justice Olola.
He noted from a perusal of the Green Card a registry record- for the suit property, it was evident that the land was first registered in the name of the Settlement Fund Trustees on October 27, 1973.
The second entry in the card is the registration in favour of Naomi Wanjiku Waiyaki, effected on July 19, 1993. The third entry, which was indicated to be in favour of Muchastone Limited, was made on April 26, 2012.
The court directed the Nyandarua County Land Registrar to cancel the title issued to the tea factory for the land, rectify the register, and restore the name of Naomi Wanjiku Waiyaki as the lawful registered owner.
